The Open Access in Data Transmission bill, considered by the World Bank and businesses as critical piece of legislation for economic growth, but which would remove the power of Congress to grant franchises to build and operate a network, has been languishing in Congress.
During the “AmCham Special Legislative Discussion Series part 3: Open Access”, it was noted that of the five priority legislative recommendations the American Chamber of Commerce of the Philippines in its Broadband Policy brief in February 2016 only the creation of the Department of ICT was passed and signed into law during the latter part of the Aquino administration.
At present, House Bill 57 filed by Cong. Victor Yap was only approved in the ICT Committee in December last year while Senate Bill 45 by Sen. Ralph Recto has been referred to Science and technology committee chaired by Sen. Nancy Binay. Open access has the strong support of business groups, by the economic Cabinet cluster and other groups.
Grace Santos, lead convenor of the “Better Broadband Alliance,” stressed that Open Access will remove the barriers to entry by new entrants and competition rendered by outdated policies and regulation. Santos pointed out the disconnected in policies and the current situation. The old policy was still on analog when digital technology is the one being used at present.
Santos stressed that the Open Access will allow more and different types of players to build and operate a data transmission network. It will remove congressional franchise and PA/CPCN (Provisional Authorities/Certificate of Public Convenience and Necessity) and introduce simple and efficient registration process.
AmCham also cited a report by the World Bank that the Philippines is the only country in the ASEAN region that still requires a franchise from Congress as the first step in obtaining a license to build and operate a network. The multilateral bank said that global best practice points to having administrative license issued by either the industry regulator or ministry in charge of ICT.
Santos explained that by passing the Open Access bill, it will open all layers of IP network, allowing wide variety of physical networks and applications to internet in open architecture because the Open Access framework will separate physical infrastructure from services wholesalers from retailers.
“Anyone can connect to anyone in technology-neutral framework, encourages innovation, and low-cost delivery,” said Santos noting that Open Access mandates interconnection, requires service performance standards, imposes penalties for violations and ensures right of internet end users.
World Bank Senior Digital Development Specialist Natasha Beschorner in a presentation of Digital connectivity in the Philippines and the ASEAN: Key Challenges stressed that Southeast Asia’s digital economy has been expanding rapidly on the back of improved connectivity, but the Philippines has been lagging behind.
“The Philippines is still lagging in terms of overall digital adoption whether business or government,” said Beschorner as he pointed out that the country is lagging on 4G and fixed broadband, which she blamed for this digital divide across the country.
“The digital divide is very real in online education, this is very significant challenge. As a development institution, we believe this is extremely important to move faster to lower barriers to market entry, make more spectrum available for internet connectivity and maintain fair and level playing field for operators.”
AmCham also showed date where the Philippines ranked 110th among 174 countries in terms of broadband speed while Vietnam ranked 59TH. There are also 17,850 cell sites in the Philippines as against 90,000 in Vietnam. In addition, the data from the study ranked the Philippines at 88th of 141 countries in terms of ICT adoption while Vietnam placed 41st.
According to Santos, Open Access will therefore fast track and lower the cost of broadband network rollout and make more spectrum available for internet connectivity. It will also make spectrum management more transparent in terms who is holding which spectrum, the cost and what it is being used for.
By enacting an Open Access, new investors will come in increasing internet connectivity. At present, there are only two telco companies providing internet services in the Philippines: PLDT and Globe.
Data also showed that 52 percent of 47,013 public schools are not connected to the internet and 80 percent of state universities and colleges are not equipped for online classes.
Due to poor connectivity, the Philippine share in 2015 of the $35 billion e-ecommerce retail market in 2015 was only 0.5 percent. E-payment use in the Philippines is still very low with only 5 percent of Filipinos regularly make digital payments. Overall, internet use in the Philippines is only 46 percent.
In fact, Santos cited a report by the Department of Labor and Employment that telecommuting among Filipinos is due to inadequacy of necessary infrastructure, particularly the internet.
There is also a big opportunity for the transport and food delivery market for online retailers to become $3 billion in 2025 from only $500 million in 2018.